(CN) – Comcast dropped its $45.2 billion merger bid for Time Warner Cable Friday after regulators raised concerns the combined firm would be an “unavoidable gatekeeper” for Internet-based services that rely on broadband to reach their customers.
The merger — one of the biggest ever to go before federal regulators — would have combined the two largest cable providers in the country. Both Comcast and Time Warner Cable declined to comment.
But the U.S. Justice Department said Friday the two companies abandoned their plans after federal regulators expressed grave antitrust concerns about the transaction.
In a written statement, outgoing Attorney General Eric Holder called the decision, “the best outcome for American consumers.”
Comcast, headquartered in Philadelphia, is the largest video and wired broadband Internet-access provider in the nation, with approximately 21.7 million video subscribers and 20.7 million broadband subscribers.
Time Warner Cable, headquartered, Cable is the fourth-largest video and the third-largest wired broadband Internet-access provider in the nation, with roughly 11.4 million video subscribers and 11.6 million broadband subscribers.
Regulators said the deal would have placed more than half of all broadband users under the control of one company, and almost a third of all pay television service.
Comcast and Time Warner Cable announced the proposed merger in February 2014, and at the time industry analysts predicted the deal would easily be approved by the Justice Department and the Federal Communications Commission.
But the political climate changed markedly in ensuing months, with consumer advocates and several lawmakers raising concerns about the leverage the combined companies would have over the ever-growing online-streaming market, programmers and others.
Tom Wheeler, chairman of the Federal Communications Commission said Friday that in the end, the merger’s risks “outweighed the benefits to the public interest.”
“Today, an online video market is emerging that offers new business models and greater consumer choice,” Wheeler said. “The proposed merger would have posed an unacceptable risk to competition and innovation especially given the growing importance of high-speed broadband to online video and innovative new services.”